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This week Mr. Dediu was a guest on The Web Ahead (another 5by5 show hosted by Jen Simmons) where he discussed how the forces of disruption apply to the web. It was an interesting discussion as usual, but if you’re pressed for time you should turn your attention to the bit after the sixty-five minute mark, when Horace volunteers some of his thoughts on the web vs. native application platforms.

I wasn’t particularly impressed by the rebuttals. In particular, the rebutter repeated the zombie trope that Apple has large App store profits (and so would move to protect them if they were threatened by open web apps becoming too popular). According to Apple’s Q2 financials there are no large iTunes store profits to protect. All of the iTunes store (music, apps, books, etc.) had revenues of $1.9 billion, of which $570 million went to Apple and the rest to the content producers (30/70 split). Apple’s share was just 1.5% of revenues for the quarter, and was used to cover operating costs of the iTunes store.

JohnDoey

Anytime anyone says Apple gets “30%” — remind them it is only 1%. The other 29 points go to servers, credit cards, and other infrastructure. The other 70 points to the developer.

HoratioB

To underscore this point, the rebuttal pushes the App Store as a cash cow for Apple. If you want to understand the way Apple creates a cash cow, compare the Smart Cover (a piece of textile/leather with embedded magnets) to the App Store. Apple revenue for these iPad accessories for one year likely exceeds the cumulative operating revenue the App Store has earned for Apple.

Walt French

I *really* liked the discussion (~ 15:45 – 24:00) about how we’ve built an internet almost totally upon ads — subsidies from transactions in the real, non-internet world.

I wouldn’t include eBay or Amazon as being ad-supported businesses. Like travel sites and others, their primary revenue source is a commission on sales that they intermediate. Yes, they additionally get ad revenues.

Now, for the huge fraction of the remaining sites, yes, it’s ads or nothing. This seems analogous to the US’s broadcast (radio & TV) industries of the 50’s–80’s, before cable and its premium, for-fee services took hold. I think a further dive into the current funding for media — the split between ads and user fees — will help us understand where the internet goes, as well as understanding how Apple (or Google) hopes to disrupt TV.

And paints the picture for the future of the mobile internet. If ads don’t work on mobile (as they mostly don’t), the money signals will come thru either carrier services or handset-specific (OK, Apple-specific) payments. Apple must be paying Yelp, Major League Baseball and others to provide its data in an ad-free format (in response to Siri or map requests), although perhaps Open Table stays in the commission mode and so doesn’t need a fee to be included on the handset.

And now we have a reason why Siri doesn’t work on older iPhones: Siri and her various data-gatherers need to get paid, and the payment is basically a commission on iPhones. Siri is indeed a salesperson for iPhones.

Dave Brandt

Hmmm. Native apps and web apps are “hired” for different but similar jobs, so I’ve never seriously thought that they could be competitive in the sense that Disruption Theory assumes.

The clear advantages of web apps are that they run automatically on all standards-compliant browsers (both mobile and desktop) and the developer needs to code for only the one platform. The end-user can interact with the app from any device that he owns. Google Mail is a great example of a successful web app; users can access the same service from any platform if they are willing to give up the advantages of separate native email clients. That’s the trade-off.

In contrast, a native app has to be recoded for each platform. Marco, for example, doesn’t want to develop an Android version for Instapaper since it would take him away from his money-maker, iOS. Microsoft has an even bigger problem trying to pursuade developers to develop for Windows phone and, soon, for Metro. Marco has also written about that.

Instead, Disruption Theory applies very nicely to HTML itself. In this case, the incumbent is an older version of HTML (HTML4 or XHTML) plus a plug-in for special effects. The plug-in is either Flash or Silverlight, so the incumbent companies are Adobe and Microsoft. Adobe, in particular has a huge vested interest in propping up Flash. Google has a vested interest in protecting Flash (a.k.a. advertising) so they tried to introduce a rival technology and threatened to remove HTML5 support from Chrome.

The case against the incumbent is that HTML5 makes plug-ins unnecessary. In particular, Apple engineered iOS so that sites have a powerful incentive to remove the plug-in requirement. You’ve explained the economic advantages of being on iOS better than anyone else, so there’s no point in repeating that.

JohnDoey

No, Web apps do not run automatically on all standards-compliant browsers. That is how it is supposed to work, but does not. Even if a browser is HTML5-compliant, it likely lacks support for many other standards which you would need to run a modern Web app. For example, ISO audio video. An app without ISO audio video is a 20th century app.

Now, native apps — they are the ones that run “automatically.” A native iOS app really does run on iPhone, iPod, and iPad.

The incumbent that is disrupted by HTML5 is not HTML4/XHTML because those failed. We made IE6/Flash apps instead. The incumbent that HTML5/WebKit disrupted was the Windows PC and IE6/Flash.

Eugene

The real issue here is that HTML and Javascipt are not going to be as good as native apps, for very much. HTML is a text layout language, JS is a scripting language. Its clear they can be manipulated to produce some results which can kinda approximate native code, but only kinda. In Apple’s WWDC only 2-3 sessions are HTML, the rest are how to use the native API to in app purchase, add game center, use the native UI, get feeds directly from the camera, set up a subscription, use iCloud, and on and on. Last year there were 1,000 new API, 3 a day if you wanted to learn them all. HTML always plays catchup with this kind of native API.

Nevermark

I agree, HTML5 as a potential disrupter of native apps is ridiculous.

HTML is a Frankenstein collection of technologies haphazardly welded together by history and need, not a well designed platform that efficiently scales to more complex problems like native frameworks can. Each advance in HTML5 toward matching pre-existing native functionality will continue to arrive with great difficulty precisely because of HTML5’s incurable foundational irregularities.

Market signaling is working just fine. The market has spoken clearly and HTML5 is useful, has a great future for subset of software projects, but is not a candidate for disrupting well designed native frameworks or languages which give greater control of hardware realities such as C and its varients.